First Quarter Revenue of $70.5 million
playAWARDS Purchases Up 54% YoY with Retail
Value of Purchases Up 80% YoY
PLAYSTUDIOS, Inc. (NASDAQ: MYPS) (“PLAYSTUDIOS” or the
“Company”), the developer of the playAWARDS loyalty platform and an
award-winning developer of free-to-play mobile and social games,
today announced financial results for the first quarter ended March
31, 2022.
First Quarter Financial Highlights
- Revenue was $70.5 million during the first quarter of 2022,
compared to $74.1 million during the first quarter of 2021. The
year-over-year change primarily reflects the overall market impact
of COVID-related stimulus checks on player engagement monetization
behaviors.
- Net loss was $25.2 million during the first quarter of 2022,
mainly due to certain non-cash charges, compared to net income of
$5.9 million during the first quarter of 2021.
- AEBITDA, a non-GAAP financial measure defined below, was $9.1
million during the first quarter of 2022, compared to $14.5 million
during the first quarter of 2021.
Andrew Pascal, Chief Executive Officer of PLAYSTUDIOS,
commented, “Entering 2022, our focus was on enhancing the value
proposition of our playAWARDS loyalty platform, preparing to offer
it as a stand-alone service to select third party developers, while
adding new capabilities, new partners, and new benefits to our own
myVIP program. As a result, we saw reward purchases increase 54.2%
year-over-year and 22.8% relative to the previous quarter. This is
the highest level of engagement we’ve seen since the onset of the
COVID pandemic. We also focused on expanding our capacity by adding
some amazing new talent, enhancing the capabilities of our European
and Asian studios. On the games front, we acquired the full rights
to myVEGAS Bingo and assumed the ongoing development and operations
of the product. In addition, we enjoyed the first full quarter of
Tetris’ contribution, helping us achieve a year-over-year increase
in average DAU of 23.5%% and an increase in MAU of 85.2%.”
He further added, “Our strategic priorities remain unchanged. As
traditional leisure and retail businesses become more dependent on
digital platforms to reach their audiences, we believe we are well
positioned to deliver the scalable, cost-efficient consumer
engagement they’re seeking. We remain firm in our belief that our
current strategic plans remain the most effective way for us to
create long-term value for our shareholders.”
Recent Business Highlights
- Continued to develop the systems, tools, and practices that
will allow us to offer playAWARDS as a stand-alone loyalty solution
to third-parties. Expanded the collection of playAWARDS partners
and benefits, adding a number of affordable national and
international options such as select Subway and Rally restaurant
locations as well as rewards from experiential entertainment brand
Lighthouse Immersive, the creative force behind the Immersive Van
Gogh experience that showcases the works of Vincent van Gogh
through 500,000 cubic feet of projection mapping, 60,600 frames of
video, and 90,000,000 pixels. The experience is currently running
in fourteen different cities throughout the United States and
Canada.
- Assumed full responsibility for the development and operation
of myVEGAS Bingo to better control the development cadence,
stability, operations and evolution of the game. myVEGAS Bingo was
recently named the “Best New Social Casino Game” at the 4th Annual
EKG Slot Awards.
- Hosted the “Women In Gaming Conference” on Wednesday, March 2,
at our Tel Aviv studio in celebration of Women’s History Month and
International Women’s Day. The event, organized in collaboration
with Playtika, CrazyLabs, Incredibuild, SciPlay, Beach Bum, and the
“Women in Gaming” community in Israel, brought together women
leaders for a variety of professional and inspirational sessions.
All proceeds from ticket sales went to support the work of QueenB,
an Israeli nonprofit organization dedicated to providing computer
science training to middle-school girls.
- Continued to expand our teams and resources globally, adding
additional development support for our core franchise
products.
Outlook
The Company is reaffirming its expectation for full-year 2022
revenue to be in the range of $305.0 million to $325.0 million. In
addition, the full-year AEBITDA expectation remains in the range of
$40.0 million to $50.0 million.
We have not provided the most directly comparable GAAP measure
for our AEBITDA outlook because certain items that are part of the
projected non-GAAP financial measure are outside of our control or
cannot be reasonably estimated without unreasonable effort.
Conference Call Details
PLAYSTUDIOS will host a conference call at 5:00 p.m. Eastern
Time today, which will include a brief discussion of the results
followed by a question and answer session.
The call will be accessible via the Internet through
https://ir.playstudios.com or by calling (888) 645-4404 for
domestic callers and (862) 298-0702 for international callers.
A replay of the call will be archived at
https://ir.playstudios.com.
About PLAYSTUDIOS, Inc.
PLAYSTUDIOS (Nasdaq: MYPS) creator of the groundbreaking
playAWARDS loyalty platform is a publisher and developer of
award-winning mobile games, including the iconic Tetris® mobile
app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, myKONAMI Slots,
myVEGAS Bingo, and MGM Slots Live. The playAWARDS loyalty platform
enables players to earn real-world rewards from a global collection
of iconic hospitality, entertainment, and leisure brands.
playAWARDS partners include MGM Resorts International, Wolfgang
Puck, Norwegian Cruise Line, Resorts World, IHG, Bowlero, Gray Line
Tours, and Hippodrome Casino among others. Founded by a team of
veteran gaming, hospitality, and technology entrepreneurs,
PLAYSTUDIOS apps combine the best elements of popular casual games
with compelling real-world benefits. To learn more about
PLAYSTUDIOS, visit playstudios.com.
Performance Indicators
We manage our business by regularly reviewing several key
operating metrics to track historical performance, identify trends
in player activity, and set strategic goals for the future. Our key
performance metrics are impacted by several factors that could
cause them to fluctuate on a quarterly basis, such as platform
providers’ policies, seasonality, player connectivity, and the
addition of new content to games. We believe these measures are
useful to investors for the same reasons. The key performance
indicators may differ from similarly titled measures presented by
other companies. For more information on our key performance
indicators, please refer to the definitions below and the
“Supplemental Data—Key Performance Indicators” section of this
press release.
Daily Active Users (“DAU”): DAU is
defined as the number of individuals who played a game on a
particular day. We track DAU by the player ID, which is assigned
for each game installed by an individual. As such, an individual
who plays two different games on the same day is counted as two DAU
while an individual who plays the same game on two different
devices is counted as one DAU. Average DAU is calculated as the
average of the DAU for each day during the period presented. We use
DAU as a measure of audience engagement to help us understand the
size of the active player base engaged with our games on a daily
basis.
Monthly Active Users (“MAU”): MAU
is defined as the number of individuals who played a game in a
particular month. As with DAU, an individual who plays two
different games in the same month is counted as two MAU while an
individual who plays the same game on two different devices is
counted as one MAU. Average MAU is calculated as the average of MAU
for each calendar month during the period presented. We use MAU as
a measure of audience engagement to help us understand the size of
the active player base engaged with our games on a monthly
basis.
Daily Paying Users (“DPU”): DPU is
defined as the number of individuals who made a purchase in a
mobile game during a particular day. As with DAU and MAU, we track
DPU based on account activity. As such, an individual who makes a
purchase on two different games in a particular day is counted as
two DPU while an individual who makes purchases in the same game on
two different devices is counted as one DPU. Average DPU is
calculated as the average of the DPU for each day during the period
presented. We use DPU to understand the size of our active player
base that makes in-game purchases. This focus directs our strategic
goals in setting player acquisition and pricing strategy.
Daily Payer Conversion: Daily Payer
Conversion is defined as DPU as a percentage of DAU on a particular
day. Average Daily Payer Conversion is calculated as the average
DPU divided by average DAU for a given period. We use Daily Payer
Conversion to understand the monetization of our active
players.
Average Daily Revenue Per DAU
(“ARPDAU”): ARPDAU is defined for a given period as the
average daily revenue per average DAU, and is calculated as game
and advertising revenue for the period, divided by the number of
days in the period, divided by the average DAU during the period.
We use ARPDAU as a measure of overall monetization of our active
players.
playAWARDS Platform Metrics
Available Rewards: Available
Rewards is defined as the monthly average number of unique rewards
available in our applications’ rewards stores. A reward appearing
in more than one application’s reward store is counted only once. A
reward is counted only once irrespective of the inventory available
through that reward. For example, one reward for a free night in a
hotel room with ten rooms available for such free night is counted
as one reward. Available Rewards only include real-world partner
rewards and exclude PLAYSTUDIOS digital rewards. We use Available
Rewards as a measure of the value and potential impact of the
program for an interested player. It is assumed that the greater
the variety and breadth of rewards offered, the more likely players
will be to ascribe value to the program.
Purchases: Purchases is defined as
the total number of rewards purchased for the period identified in
which a player exchanges loyalty points for a reward. Purchases are
not adjusted for refunds. Purchases only include purchases of
real-world partner rewards and exclude any PLAYSTUDIOS digital
rewards. The Company does not receive any compensation or revenues
from Purchases. We use Purchases as a measure of audience interest
and engagement with our playAWARDS platform.
Retail Value of Purchases: Retail
Value of Purchases is defined as the cumulative retail value of all
rewards listed as Purchases for the period identified. The retail
value of each reward listed as Purchases is the retail value as
determined by the partner upon creation of the reward. In the case
where the retail value of a reward adjusts depending on time of
redemption, the average retail value is used. Retail Value of
Purchases only include the retail value of real-world partner
rewards and exclude the cost of any PLAYSTUDIOS branded
merchandise. We use Retail Value of Purchases to help us understand
the real-world value of the rewards that are purchased by our
players.
Non-GAAP Financial Measures
To provide investors with information in addition to results as
determined by GAAP, the Company discloses Adjusted Earnings Before
Interest Taxes Depreciation and Amortization (“AEBITDA”) as a
non-GAAP measure that management believes provides useful
information to investors. This measure is not a financial measure
calculated in accordance with GAAP and should not be considered as
a substitute for revenue, net income or any other operating
performance measure calculated in accordance with GAAP.
We define AEBITDA as net income (loss) before interest, income
taxes, depreciation and amortization, restructuring and related
costs (consisting primarily of severance and other restructuring
related costs), stock-based compensation expense, and other income
and expense items (including special infrequent items, foreign
currency gains and losses, and other non-cash items). We also
present AEBITDA margin, a non-GAAP measure, which we calculate as
AEBITDA as a percentage of net revenues.
We believe that the presentation of AEBITDA provides useful
information to investors regarding the Company’s results of
operations because the measure assists both investors and
management in analyzing and benchmarking the performance and value
of our business. AEBITDA provides an indicator of performance that
is not affected by fluctuations in certain costs or other items.
Accordingly, management believes that this measure is useful for
comparing general operating performance from period to period, and
management relies on this measure for planning and forecasting of
future periods. Additionally, this measure allows management to
compare results with those of other companies that have different
financing and capital structures. However, other companies may
define AEBITDA differently, and as a result, our measure of AEBITDA
may not be directly comparable to that of other companies. For
further information regarding these non-GAAP measures, including
the reconciliation of these non-GAAP financial measures to their
most directly comparable GAAP financial measures, please refer to
the “Reconciliation of Net Income (Loss) to AEBITDA” section of
this press release.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our future financial and
operating performance, our liquidity and capital resources, the
development and release plans of our games, our plans to
commercialize the playAWARDS platform as a stand-alone service for
use by third parties, our increased capacity and use of personnel
in European and Asian studios, and our mergers and acquisition
strategy, all of which involve risks and uncertainties. Actual
results may differ materially from the results predicted, and
reported results should not be considered as an indication of
future performance. Forward-looking statements include all
statements that are not historical facts and can be identified by
terms such as “may,” “might,” “will,” “should,” “expects,” “plans,”
“anticipates,” “intends,” “believes,” “estimates,” “predicts,”
“potential” or “continue,” the negative of these terms and other
comparable terminology that conveys uncertainty of future events or
outcomes. These forward-looking statements involve known and
unknown risks, uncertainties, assumptions and other factors that
may cause actual results to differ materially from statements made
in this press release, including our ability to develop and publish
our games; risks related to defects, errors, or vulnerabilities in
our games and IT infrastructure; our ability to attract new, and
retain existing, players of our games; the failure to timely
develop and achieve market acceptance of new games and maintain the
popularity of our existing games; rapidly evolving technological
developments in the gaming market; competition in the industry in
which we operate; our financial performance; our ability to execute
merger and acquisition transactions; legal and regulatory
developments; and general market, political, economic and business
conditions. Other potential risks and uncertainties that could
cause actual results to differ from the results predicted include,
among others, those risks and uncertainties included under the
captions “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021
filed with the Securities and Exchange Commission (the “SEC”) on
March 3, 2022, and in other filings we make with the SEC from time
to time, including our Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2022, to be filed with the SEC.
All information provided in this release is based on information
available to us as of the date of this press release and any
forward-looking statements contained herein are based on
assumptions that we believe are reasonable as of this date. Undue
reliance should not be placed on the forward-looking statements in
this press release, which are inherently uncertain. We undertake no
duty to update this information unless required by law.
SOURCE: PLAYSTUDIOS, Inc.
PLAYSTUDIOS, INC.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Unaudited and in thousands,
except per share data)
Three Months Ended March
31,
2022
2021
Net revenues
$
70,451
$
74,097
Operating expenses:
Cost of revenue(1)
21,033
24,488
Selling and marketing
20,540
17,000
Research and development
16,981
14,746
General and administrative
9,691
4,223
Depreciation and amortization
8,394
6,034
Restructuring and related
8,655
56
Total operating costs and expenses
85,294
66,547
Income (loss) from operations
(14,843
)
7,550
Other income (expense), net:
Change in fair value of warrant
liabilities
(2,716
)
—
Interest expense, net
(5
)
(42
)
Other income (expense), net
187
(242
)
Total other income (expense), net
(2,534
)
(284
)
Income before income taxes
(17,377
)
7,266
Income tax benefit (expense)
(7,835
)
(1,348
)
Net income (loss)
$
(25,212
)
$
5,918
Net income (loss) per share attributable
to Class A and Class B common stockholders:
Basic
$
(0.20
)
$
0.06
Diluted
$
(0.20
)
$
0.05
Weighted average shares of common stock
outstanding:
Basic
126,337
93,809
Diluted
126,337
109,951
(1)
Amounts exclude depreciation and
amortization.
PLAYSTUDIOS, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited and in thousands,
except par value amounts)
March 31, 2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
219,965
$
213,502
Receivables
20,982
20,693
Prepaid expenses
3,456
5,059
Income tax receivable
1,827
2,117
Other current assets
1,188
413
Total current assets
247,418
241,784
Property and equipment, net
7,115
5,289
Internal-use software, net
35,622
43,267
Goodwill
5,059
5,059
Intangibles, net
17,068
18,755
Deferred income taxes
3,803
6,282
Other long-term assets
12,481
14,408
Total non-current assets
81,148
93,060
Total assets
$
328,566
$
334,844
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
8,759
7,793
Warrant liabilities
9,237
6,521
Accrued liabilities
16,769
15,599
Total current liabilities
34,765
29,913
Minimum guarantee liability
—
—
Deferred income taxes
5,218
—
Other long-term liabilities
2,235
1,464
Total non-current liabilities
7,453
1,464
Total liabilities
$
42,218
$
31,377
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value
(100,000 shares authorized, no shares issued and outstanding as of
March 31, 2022 and December 31, 2021)
—
—
Class A common stock, $0.0001 par value
(2,000,000 shares authorized, 110,339 and 110,066 shares issued and
outstanding as of March 31, 2022 and December 31, 2021,
respectively)
11
11
Class B common stock, $0.0001 par value
(25,000 shares authorized, 16,130 shares issued and outstanding as
of March 31, 2022 and December 31, 2021.
2
2
Additional paid-in capital
276,621
268,522
Retained earnings
9,327
34,539
Accumulated other comprehensive income
387
393
Total stockholders’ equity
286,348
303,467
Total liabilities and stockholders’
equity
$
328,566
$
334,844
PLAYSTUDIOS, INC. RECONCILIATION OF NET
INCOME (LOSS) TO AEBITDA (Unaudited and in thousands, except
percentages)
The following table sets forth the reconciliation of AEBITDA and
AEBITDA margin, which we calculate as AEBITDA as a percentage of
net revenues, to net income (loss) and net income (loss) margin,
the most directly comparable GAAP measures.
Three Months Ended March
31,
2022
2021
Net income (loss)
$
(25,212
)
$
5,918
Depreciation & amortization
8,394
6,034
Income tax (benefit) expense
7,835
1,348
Stock-based compensation expense
6,868
900
Change in fair value of warrant
liability
2,716
—
Restructuring and related(1)
8,655
56
Other(2)
(182
)
284
AEBITDA
9,074
14,540
GAAP revenue
70,451
74,097
Margin as a % of
revenue
Net income (loss) margin
(35.8
) %
8.0
%
AEBITDA margin
12.9
%
19.6
%
(1)
Amounts reported during the three months
ended March 31, 2022 and 2021 consist of severance-related costs
and amounts reported during the three months ended March 31, 2022
consist of (i) non-cash impairment charge related to the suspension
of Kingdom Boss development, (ii) fees related to potential mergers
and acquisitions, and (iii) fees related to the Tender Offer for
the Warrants.
(2)
Amounts reported in “Other” include
interest expense, interest income, gains/losses from equity
investments, foreign currency gains/losses, and non-cash
gains/losses on the disposal of assets.
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – KEY
PERFORMANCE INDICATORS
(Unaudited and in thousands,
except percentages and ARPDAU)
Three Months Ended March
31,
2022
2021
Change
% Change
Average DAU
1,555
1,259
296
23.5
%
Average MAU
6,913
3,733
3,180
85.2
%
Average DPU
31
36
(5
)
(13.9
)%
Average Daily Payer Conversion
2.0
%
2.9
%
(0.9pp)
(31.0
)%
ARPDAU (in dollars)
$
0.50
$
0.65
$
(0.15
)
(23.1
)%
pp = percentage points
PLAYSTUDIOS, INC.
SUPPLEMENTAL DATA – PLAYAWARDS
PLATFORM METRICS
(Unaudited and in thousands,
except available rewards)
Three Months Ended March
31,
2022
2021
Change
% Change
Available Rewards (in units)
521
385
136
35.3
%
Purchases (in units)
592
384
208
54.2
%
Retail Value of Purchases (in dollars)
$
33,704
$
18,692
$
15,012
80.3
%
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PLAYSTUDIOS CONTACTS
Investor Relations IR@playstudios.com Media Relations
Amy Rossetti media@playstudios.com
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